News |

Nordea calls for housing company loan cap in Finland

Nordic banking giant Nordea says it is concerned about the increasing volume of loans taken by housing companies, and is calling for a cap on such debt.

Kerostalo Lauttasaaressa
For example, in a case of a housing company's newly-constructed building, Nordea suggested the companies have a loan ceiling cap of around 50 percent of the price of a new flat.

Household debt in Finland is increasing at an accelerated pace, according to Nordea.

Banks have tried to stifle the trend by introducing various rules - and partially succeeded. But Nordea now says it is concerned that there is no similar regulation of borrowing by housing companies.

The Nordics' biggest bank is not alone in its concern about housing company loans. Yle News last month reported that the number of heavily-indebted housing companies has been increasing for years.

Nordea says that housing companies' share of loan volumes has been on the increase for the past decade, according to a press release issued Monday.

The volume of housing loans increased by two billion euros in 2017, and accounted for about 13 percent of all mortgages.

Personal household mortgage levels, on the other hand, have remained steady, according to the bank.

Nordea said that housing company loans, along with the inherent risks they carry, are increasingly tied to household loans due to an increased interest in housing investments.

For example, in the case of a housing company's newly-constructed building, Nordea suggested that the companies have a loan ceiling cap of around 50 percent of the price of a new flat.

Latest in: News

Headlines

Our picks

Latest

Muualla Yle.fi:ssä